Glühbirne
ellisa_studio / stock.adobe.com
2026-05-06

Distribution grids - Curbing the dramatic rise in costs

The energy transition is achievable. However, it comes at an enormous cost: according to the Federal Network Agency (BNetzA), distribution grid operators alone must invest around 110 billion euros into infrastructure by 2033, and by 2045, the requirement will rise to as much as 207 billion euros. The Power Engineering Society within VDE (VDE ETG) is exploring cost-containment approaches that could save billions of euros. Policymakers are called upon to adjust the framework conditions accordingly.

Kontakt
Markus B. Jaeger

With this position paper, VDE ETG clearly distances itself from calls for subsidies. The goal is to optimize processes, make optimal use of existing infrastructure, and thus enable a cost-effective transformation of the energy system. The focus is on methods that provide quick and effective help without creating new problems elsewhere. Key points are: 

  • Actively managing grids: If serious voltage deviations are imminent, grid operators may – in clearly defined exceptional cases – temporarily curtail decentralized power generators via so-called curative grid management or disconnect consumers from the grid. This flexibility allows for better utilization of the grids, which has a significant impact on grid costs. Policymakers are called upon to incentivize these measures.
  • Utilize flexible grid connection agreements: As a general rule, anyone connected to the grid is guaranteed full power at all times. Notwithstanding this, since 2023, utilities have been able to enter into flexible grid connection agreements with their customers in the spirit of curative grid management. This tool should be utilized much more extensively. At the same time, there is still a significant need for research: legislators must give grid operators the option to establish experimental zones and support research projects.
  • End uncontrolled proliferation: Electricity suppliers are obligated to connect approved large-scale battery storage systems and ground-mounted photovoltaic plants across Germany. This uncontrolled expansion is devouring millions of euros. Therefore, location-flexible technologies should be deployed where grid capacity is already available. The federal government can and must issue corresponding guidelines.
  • Rethink grid planning: Germany’s distribution grids operate at low capacity on an annual average. Planning must be based on real load profiles rather than theoretical extreme cases. The Federal Network Agency (BNetzA) should require this approach. In doing so, the effects of curative grid management and the increasing number of flexible grid connection agreements must also be taken into account.

Adequately compensate for operational services

To make the power grid fit for the future, there are essentially two approaches. First, expand the grids to the maximum extent possible. The associated investment costs are financed through grid fees. Second, to improve grid utilization through digital solutions. This entails operational costs for grid operators – which are currently not compensated. Legislators must create incentives from a total-cost perspective so that grid operators provide meaningful operational services. 

Cost increases must be limited
Köster / VDE